OPEC+ agreed on Thursday to stick to a planned oil output hike this summer but avoided discussing policy from September onwards as prices have risen on tight supplies and worries that the group has little ability to pump more.
The group, which comprises the Organization of the Petroleum Exporting Countries and an informal group of non-OPEC members led by Russia and produces over 40% of global supply, concluded a meeting on Thursday via videoconference by deciding to stay the course with its production policy.
It means it will increase monthly overall production for the month of August to 648,000 barrels per day (bpd).
The meeting was held ahead of US President Joe Biden’s scheduled trip to the Middle East in mid-July that includes a visit to Saudi Arabia, pushing energy policy into the spotlight as the US and other countries face soaring fuel prices that are driving up inflation.
Asked at a news conference in Spain if he would ask the Saudi leaders to increase oil production, Biden replied, “No.”
Instead, he would continue to make the case that all Gulf states should raise oil output, he said.
To face the price hike, France on Monday urged oil producing nations to boost their output in an “exceptional manner,” to help bring down soaring crude prices fueled by the war in Ukraine.
“We need producing countries to produce in an exceptional measure,” said the French presidency on the sidelines of the G7 summit in the Bavarian Alps.
At its June 2 meeting, OPEC+ decided to increase output each month by 648,000 barrels per day in July and August, up from a previous plan to add 432,000 bpd per month, citing increased demand due to the summer travel season.
Washington welcomed June's decision, which followed months of pressure from the West on OPEC+ to raise production to help lower oil prices.
International prices hit their highest since the record levels of 2008 after the West imposed sanctions on Russia over its invasion of Ukraine begun on Feb. 24, which Moscow calls “a special military operation.”
They have since eased but rose above $115 this week because of tight supply and concern that OPEC has little ability to raise output.
Meanwhile, Russian Deputy Prime Minister Alexander Novak said on Thursday that attempts to limit the price of Russian oil could lead to “disbalance” in the market and push prices higher.
His comments come after G7 leaders agreed on Tuesday to explore “the feasibility of introducing temporary import price caps” on Russian fossil fuel, including oil, and tasked ministers to evaluate the proposal urgently.
European Union officials told Reuters on Thursday that Germany and other EU governments are cautious about the idea.